From Wikipedia, the free encyclopedia A 501 (c) (3) organization is a corporation, trust, unincorporated association, or other type of organization exempt from federal income tax under section 501 (c) (3) of Title 26 of the United States Code. It is one of the 29 types of 501 (c) nonprofit organizations in the US.
- Form 1023
Form 1023 is a United States IRS tax form, also known as the...
The two exempt classifications of 501 organizations are as...
- Obtaining status
The basic requirement of obtaining tax-exempt status is that...
- Form 1023
From Wikipedia, the free encyclopedia Wikimedia Commons has media related to 501 (c) (3) nonprofit organizations. The main article for this category is 501 (c) (3) organization.
A 501 (c) organization is a nonprofit organization in the federal law of the United States according to Section 501 (c) and is one of over 29 types of nonprofit organizations exempt from some federal income taxes. Sections 503 through 505 set out the requirements for obtaining such exemptions.
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- Obtaining Status
- Tax-Deductible Charitable Contributions
- Limitations on Political Activity
- Political Campaign Activities
- Foreign Activities
The two exempt classifications of 501(c)(3) organizations are as follows: 1. A public charity, identified by the Internal Revenue Service(IRS) as "not a private foundation", normally receives a substantial part of its income, directly or indirectly, from the general public or from the government. The public support must be fairly broad, not limited to a few individuals or families. Public charities are defined in the Internal Revenue Code under sections 509(a)(0) through 509(a)(4). 2. A private foundation, sometimes called a non-operating foundation, receives most of its income from investments and endowments. This income is used to make grants to other organizations, rather than being disbursed directly for charitable activities. Private foundations are defined in the Internal Revenue Code under section 509(a) as 501(c)(3) organizations, which do not qualify as public charities.
The basic requirement of obtaining tax-exempt status is that the organization is specifically limited in powers to purposes that the IRS classifies as tax-exempt purposes. Unlike for-profit corporations that benefit from broad and general purposes, non-profit organizations need to be limited in powers to function with tax-exempt status, but a non-profit corporation is by default not limited in powers until it specifically limits itself in the articles of incorporation or nonprofit corporate bylaws. This limiting of the powers is crucial to obtaining tax exempt status with the IRS and then on the state level. Organizations acquire 501(c)(3) tax exemption by filing IRS Form 1023. As of 2006[update] the form must be accompanied by a $850 filing fee if the yearly gross receipts for the organization are expected to average $10,000 or more. If yearly gross receipts are expected to average less than $10...
Individual may take a tax deduction on a charitable gift to a 501(c)(3) organization that is organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals. An individual may not take a tax deduction on gifts made to a 501(c)(3) organization that is organized and operated exclusively for the testing for public safety. In the case of tuition fees paid to a private 501(c)(3) school or a church school, the payments are not tax-deductible charitable contributions because they are payments for services rendered to the payee or the payee's children. The payments are not tax-deductible charitable contributions even if a significant...
All 501(c)(3) organizations must make available for public inspection its application for tax-exemption, including its Form 1023 or Form 1023-EZ and any attachments, supporting documents, and follow-up correspondence with the Internal Revenue Service. The same public inspection requirement applies to the organization's annual return, namely its Form 990, Form 990-EZ, Form 990-PF, Form 990-T, and Form 1065, including any attachments, supporting documents, and follow-up correspondence with the Internal Revenue Service, with the exception of the names and addresses of donors on Schedule B.Annual returns must be made publicly available for a three-year period beginning with the due date of the return including any extension of time for filing. The Internal Revenue Service provides information about specific 501(c)(3) organizations through its Tax Exempt Organization Search online. A private nonpr...
Section 501(c)(3) organizations are prohibited from supporting political candidates, as a result of the Johnson Amendment enacted in 1954. Section 501(c)(3) organizations are subject to limits on lobbying, having a choice between two sets of rules establishing an upper bound for their lobbying activities. Section 501(c)(3) organizations risk loss of their tax-exempt status if these rules are violated.An organization that loses its 501(c)(3) status due to being engaged in political activities cannot subsequently qualify for 501(c)(3) status.
Churches must meet specific requirements to obtain and maintain tax-exempt status; these are outlined in "IRS Publication 1828: Tax Guide for Churches and Religious Organizations".This guide outlines activities allowed and not allowed by churches under the 501(c)(3) designation. In 1980, the United States District Court for the District of Columbiarecognized a 14-part test in determining whether a religious organization is considered a church for purposes of the Internal Revenue Code. Having an established congregation served by an organized ministry is of central importance. Points 4, 6, 8, 11, 12, and 13 are also especially important. Nevertheless, the 14-point list is a guideline, it is not intended to be all-encompassing, and other relevant facts and circumstances may be factors. Although there is no definitive definition of a church for Internal Revenue Code purposes, in 1986 the United States Tax Co...
Organizations described in section 501(c)(3) are prohibited from conducting political campaign activities to intervene in elections to public office.The Internal Revenue Service website elaborates on this prohibition:
In contrast to the prohibition on political campaign interventions by all section 501(c)(3) organizations, public charities (but not private foundations) may conduct a limited amount of lobbyingto influence legislation. Although the law states that "no substantial part" of a public charity's activities can go to lobbying, charities with large budgets may lawfully expend a million dollars (under the "expenditure" test), or more (under the "substantial part" test) per year on lobbying. The Internal Revenue Service has never defined the term "substantial part" with respect to lobbying. To establish a safe harbor for the "substantial part" test, the United States Congress enacted §501(h), called the Conable election after its author, Representative Barber Conable. The section establishes limits based on operating budget that a charity can use to determine if it meets the substantial test. This change...
A 501(c)(3) organization is allowed to conduct some or all of its charitable activities outside the United States. A 501(c)(3) organization is allowed to award grants to foreign charitable organizations if the grants are intended for charitable purposes and the grant funds are subject to the 501(c)(3) organization's control. Additional procedures are required of 501(c)(3) organizations that are private foundations.
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501 (c) (3) is one of the sections of the Internal Revenue Code that has worked its way into common language, making it reasonable to have an article on it. I don't know how far you want to take it. Churchs are an interesting area of controversy since it is troubling to have a goverment agency ruling on what does or does not constitute a Church.
501 (c) (3) organizations, named after the section of the Internal Revenue Code that defines them, are the most common category of nonprofit organization in the United States. They make up 74% of all tax-exempt organizations as of 2013, encompassing organizations with charitable, educational, or religious missions.
- 18 min
- Creating a Nonprofit Determine what type of nonprofit organization you want to create. Choose an issue that is important to you or something that is a matter of public interest.
- Filing Documents File Articles of Incorporation. Articles of Incorporation are official statements that you are creating an organization, and they are filed with a state's corporations office.
- Determining Finances Hire a certified public accountant (CPA). Consider the following factors: Look for an accountant who has experience with organizations like yours.
- Applying for Tax Exempt Status Apply for recognition of tax-exempt public charity status. You'll need to fill out either Form 1023 or 1024, which is an application.
- Checking the IRS Database Gather information about the non-profit. To properly check whether a non-profit has exempt status, you need to gather as much of the following information as possible
- Using Other Methods Ask for a copy of the determination letter. Once an organization has been given 501(c)(3) status, the qualified non-profit will receive a determination letter from the IRS.
- Researching a Non-Profit Ask for information about the non-profit. Legitimate charities should be willing to provide substantial information to potential donors.